44-300.I  Electronic Benefit Transfer (EBT) Theft (Skimming)

 

Table of Contents

“EBT Theft” includes the following sections:

 

Section

Topic

44-300.I.1

Purpose

44-300.I.2

Introduction

44-300.I.3

AB 2035 Reporting Process

44-300.I.4

Report of Electronic Theft of Cash Aid Form (EBT 2259)

44-300.I.5

Good Cause for Not Filing a Police Report

44-300.I.6

Recipient Timeframe for Filing a Claim

44-300.I.7

AB 2035 Payment Process

44-300.I.8

Overpayments

44-300.I.9

Referrals for Investigation

44-300.I.10

High Dollar Claims

44-300.I.11

Notices of Action

44-300.I.12

EBT Benefit Type Code

44-300.I.13

Security Breaches

44-300.I.14

CDSS Contact

 

 

 

44-300.I.1 Purpose

To provide instructions for the implementation of Assembly Bill (AB) 2035, which amended Welfare & Institutions (W&I) Code section 10072 to require the prompt restoration of EBT cash benefits lost due to electronic theft.  Electronic theft occurs when a recipient has not lost physical possession of their EBT card however, money is stolen from their EBT account electronically (often called skimming).

 

ACL 13-67

 

CPG Letter No. 323

 

 

44-300.I.2 Introduction

W&I section 10072, the California Department of Social Services (CDSS) has established a protocol for recipients who believe their EBT cash benefits have been stolen via electronic theft and to have the stolen benefits promptly restored to their EBT account if the report is determined to meet the requirements. This protocol includes a reporting form, timelines for county review, instructions regarding when a referral for investigation is made, and notice of action language.

 

All cash assistance programs that use the EBT system to issue benefits are subject to the requirements stipulated in W&I section 10072.  Those cash programs include California Work Opportunity and Responsibility to Kids (CalWORKs) and all Welfare to Work supportive services, Refugee Cash Assistance (RCA), Cash Assistance Program for Immigrants (CAPI) and General Relief (GR).

 

Repayments for loss due to electronic theft are reimbursed using 100% State General Fund dollars. 

 

W&I section 10072 does not apply to CalFresh and California Food Assistance Program (CFAP) benefits.  If a recipient believes that their CalFresh or CFAP benefits have been stolen as a result of electronic theft, they are to call the California EBT Customer Service Helpline (1-877-328-9677) to report the stolen benefits and file a Dispute Claim.

 

 

44-300.I.3
AB 2035 Reporting Process

There are two ways the recipient will report the possible electronic theft:

 

1.    Recipient contacts the California EBT Customer Service Helpline, which will explain the reporting process and refer the recipient to the County for additional information and submission of the EBT 2259.  The Customer Service Representative (CSR) will provide a Dispute Claim Number to the recipient.  The CSR will deactivate the recipient’s EBT card and issue a new one by mail or refer the recipient to go to the nearest county welfare office to obtain an over the counter (OTC) replacement EBT card;  or

 

2.    Recipient contacts the County directly.  The worker will explain the AB 2035 process to the recipient, provide the EBT 2259 form, and inform the recipient to also contact the EBT Customer Service Helpline to report the stolen benefits and file a cash dispute claim.  The worker will deactivate the recipient’s EBT card and issue a new one.

 

 

44-300.I.4
Report of Electronic Theft of Cash Aid Form (EBT 2259)

The EBT 2259 will be used by recipients to report claims of electronic theft.  The form must be filled out completely, including a police report number, recipient signature and date.  The EBT 2259 includes an instruction page to assist the recipient in completing the form.  The instruction page also includes helpful tips for recipients, including how to keep the EBT card and Personal Identification Number (PIN) safe in order to help prevent electronic theft.

 

The recipient is required to file a police report, unless there is good cause.  If the recipient does file a police report, he/she is required to write the police report number on the EBT 2259.  A temporary police report number is acceptable on the EBT 2259.  The recipient is not required to attach a copy of the police report to the EBT 2259.

 

The worker may have to assist the recipient in completing the EBT 2259, including helping them with how to file a police report.  This may include providing information about the location of the local police/sheriff station, providing the local non-emergency police/sheriff telephone number, and information on how to file a police report online, if available. 

 

Upon receipt of the EBT 2259, the worker will review:

·         The report to ensure the recipient has provided complete information

·         The case file for thorough documentation of the claim; and,

·         If provided by the recipient, the police report. 

 

If necessary, the worker should ask questions regarding the recipient’s stolen benefits claim to complete the EBT 2259.

 

The worker will also review the recipient’s case file to see if they have had any other EBT 2259 filings within the last year and take appropriate actions (please see Referrals for Investigation below).  All EBT 2259 filings must be tracked individually to meet these referral requirements.

 

 

44-300.I.5
Good Cause for Not Filing a Police Report

The following are examples of good cause for not filing a police report:

 

·         The police department is not taking reports for identity theft and/or financial fraud; or

·         The police report form is not available in the recipient’s native language and the police department does not have non-English speaking translation services; or

·         There is a fee to file a police report; or

·         The police department fails to provide disability accommodation and the customer needs this; or

·         The recipient is required to file a police report in person and one of the following applies:

o   The recipient does not have transportation; or

o   The recipient does not have money for gas, parking or a bus pass; or

o   The recipient’s participation in Welfare to Work or Work Project would be impacted if they were required to submit an in-person report.

 

 

44-300.I.6
Recipient Timeframe for Filing a Claim
 

The recipient should report the theft as soon as it occurs.  However, claims filed for loss due to electronic theft are subject to the 90 calendar day time frame set forth under EBT regulations.  Therefore, the recipient must contact the County, Customer Service Helpline, and complete an EBT 2259 within 90 calendar days from the date of the electronic theft transaction to be eligible for an AB 2035 repayment.

 

 

44-300.I.7
AB 2035 Payment Process

Upon receipt of a fully completed EBT 2259, the worker has 10 business days to issue an AB 2035 repayment.  See 44-300.I.9 and 44-300.I.10 below, for exceptions to this timeframe.  The AB 2035 repayment will not be counted as income or property in the month paid or in the next month.

 

After receipt of a fully completed EBT 2259, and before issuing the AB 2035 repayment, the worker will check EPPIC records from the ‘Inquire on History Data from EBT’ from the CalWIN Interfaces Activities sub-system. The worker will review the EPPIC records each work day to determine if the cash dispute claim has been denied or approved by the State EBT Vendor.  The State EBT Vendor has 25 calendar days to issue an approval or denial for the cash dispute claim.  EPPIC provides EBT transaction activity for individual cases.  Also, the worker may check the Statewide Automated Reconciliation System (SARS) “Claim Activity Report.”  This report lists the status of the EBT Vendor cash dispute claims (for example, new, approved, or denied).

 

 

If the cash dispute claim …

Then the worker will …

has been approved by the State EBT Vendor,

not issue the electronic theft loss repayment, as the recipient has already been reimbursed by the State EBT Vendor.  If a claim is approved, the recipient will receive an automated phone call from the State EBT Vendor that their EBT account has been credited.

is denied by the State EBT Vendor before the 10th business day after the County has received the completed EBT 2259,

issue the electronic theft loss repayment immediately.

 

Note:  In most instances the State EBT Vendor denies electronic theft claims when it appears that a legitimate EBT card and PIN was used to perform the cash transaction.  The State EBT Vendor only investigates and makes benefit adjustments for system errors.  The vendor does not investigate or determine electronic theft transactions.

has not been approved or denied by the State EBT Vendor within 10 business days from the date the County has received the completed EBT 2259,

issue the electronic theft loss repayment no later than the 10th business day.

 

* A cash dispute claim that is based on electronic theft will almost always be denied by the State EBT Vendor as it looks like a valid transaction with a PIN and card used.  W&I section 10072 states the recipient must be reimbursed promptly, so the worker can submit payment as soon as the cash dispute claim is denied.  It would not be correct to issue a repayment if it is not electronic theft.  For example, if the card was lost or stolen.

 

** To promptly restore benefits, 10 business days is the cutoff for reimbursement.  Benefits must be restored if it is electronic theft, but not if it is a lost/stolen EBT card.

 

Follow the actions in BEnDS 6358 to issue the electronic theft loss replacement benefits.

 

 

44-300.I.8
Overpayments
 

The worker must continue to check EPPIC for 25 calendar days from the date of the cash dispute claim to verify if the State EBT Vendor has approved or denied the recipient’s cash dispute claim.  If the cash dispute claim is approved after a worker has issued the electronic theft loss repayment, the second cash issuance is an overpayment.  The worker will need to establish an overpayment, issue a Notice of Action (NOA), and begin collection of the ineligible amount in accordance with CPG 44-350.E Methods of Overpayment Recovery.  This will be treated as an administrative error overpayment.  In addition an EBT cardholder can voluntarily elect to reimburse all or a portion of the overpaid funds to the County in a lump sum (for example, Voluntary Cash Recovery).

 

An overpayment cannot be avoided if the electronic theft loss repayment is made before the EBT Vendor approves the cash dispute claim, as EBT rules do not allow the State EBT Vendor to stop the payment from being applied to the recipient’s EBT account.  However, it is anticipated that these types of overpayments will rarely occur.

 

 

44-300.I.9
Referrals for Investigation
 

A referral for investigation will be made when the worker determines that, based upon an observation of conditions under which the claim is being made, knowledge of the case, or other sources of information provide reason to suspect that fraud exists or has been attempted.

 

Additionally, dollar and frequency thresholds have been established to determine criteria as to when to make a referral for investigation.  These thresholds do not preclude other situations or criteria the workers may determine necessitate a referral for investigation.

 

 

Situation

Action

 

·  An electronic theft loss claim is equal to or exceeds $1,000 and the claim amount is over the Maximum Aid amount for the assistance unit; or

·  More than one electronic theft loss approved claim has been processed during a 6 month period.

The worker will make a referral for investigation to the Public Assistance Fraud Division (PAFD)

 

When 3 or more electronic theft loss claims are filed within a 12 month period.

 

 

The worker will make a referral for investigation and pend the electronic theft loss repayment for up to 25 calendar days

 

Note:  If PAFD determines that an investigation will not be initiated, the electronic theft loss repayment will be issued immediately but no later than 25 calendar days from the receipt of the completed EBT 2259.

 

Electronic theft loss repayment is pended and PAFD determines an investigation will be initiated

 

 

 

 

 

 

 

 

 

 

 

The worker will monitor the status of the investigation and:

 

If the investigation …

Then the …

is completed within 25 calendar days and the claim is determined to be fraudulent,

electronic theft loss repayment will not be issued.

is completed within 25 calendar days and PAFD determines that fraud did not occur,

electronic theft loss repayment will be issued immediately upon completion of the investigation, but no later than the 25th day.

 

is not completed within 25 calendar days,

electronic theft loss repayment must be issued by the 25th day, while the investigation is pending.

results show evidence of fraud,

worker will pursue administrative actions.

 

 

44-300.I.10
High Dollar Claims
 

An electronic theft loss claim that is equal to or exceeds $2,000 may require an extensive review and/or investigation of the case.  Thus workers are not required to issue the electronic theft loss repayment until case specific facts have been gathered to allow the worker to make an informed decision of whether to approve the claim.

 

The worker should issue the electronic theft loss repayment immediately if the review or investigation determines the repayment is appropriate.  The review of these claims will be given priority, referred for investigation if necessary and completed as soon as administratively possible.

 

 

44-300.I.11
Notices of Action
 

Four new Notices of Action (NOA) have been developed for electronic theft loss cases.

 

 

No.

Title

Used when an Electronic Theft Loss

 

M44-350K

EBT Replacement Denial

Repayment is denied

 

M44-350L

Notice of Overpayment

Overpayment occurs

 

TEMP WI 10072

EBT Replacement Approval

Repayment is approved

 

TEMP WI 10072A

EBT Replacement Review

Repayment is delayed pending county review

 

 

 

 

 

44-300.I.12
EBT Benefit Type Code

A new EBT benefit type code has been established and will be used when issuing electronic theft loss repayments.  The EBT benefit type information is:

 

Code

Entry

Benefit Type Name

Electronic Theft Replacement Cash Benefits (ETRCB)

Benefit Type Code

ETRCB

Aid Code

Z5

 

Electronic theft loss repayments will be issued through CalWIN (see BEnDS 6385).  The electronic theft loss repayment must not be issued using the original aid code.

 

 

44-300.I.13
Security Breaches
 
 

W&I section 10072 gives authority to CDSS to reinstate benefits immediately for breaches of security known to CDSS, without the need for recipient reporting and verification.

 

In these isolated situations, CDSS will immediately be in contact with the county and consortium staff and will provide further instructions.  Impacted recipients will be notified that their benefits have been restored.

 

 

44-300.I.14
CDSS Contact
 

Workers must contact the CalWORKs EBT Program Specialist through their Corrective Action Liaison.  The Program Specialist will contact CDSS so that CDSS can track trends in electronic theft, improve the reporting process, and maintain program integrity.